The Fannie Mae headquarters is seen in Washington in August 2011. / Manuel Balce Ceneta/Associated Press

Written by

Detroit Free Press Personal Finance Columnist

Troy-based Flagstar Bancorp has entered into a $121.5 million agreement to resolve issues relating to mortgage loans that were sold to Fannie Mae but later went bad.

After paid claims and other adjustments, Flagstar Bank will pay $93.5 million to Fannie Mae. The loans originated between Jan. 1, 2000 and Dec. 31, 2008.

“This agreement represents another significant milestone in Flagstar’s resolution of legacy issues,” said Alessandro (Sandro) DiNello, Flagstar’s president and Chief Executive Officer in a statement.

“We remain dedicated to providing high quality products and services to our customers while further reducing risk and improving performance. We are confident that we are taking the right steps to deliver improved financial results and shareholder returns.”

At Sept. 30, Flagstar said it had $174 million set aside to cover potential losses associated with repurchase claims.

Flagstar operates 111 banking centers, all in Michigan, and 45 home lending centers in 19 states.